16 December 1998 External T.I. 9831815 - CHILD SUPPORT AMOUNTS PAYABLE

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Are the support payments subject to the old child support rules given that the court order is dated April 16, 1997, even though the child support amounts payable only commenced on May 1, 1997?

Position:

Child support amounts payable pursuant to a pre-May 1997 court order are subject to the old child support rules even though the child support amounts payable commenced on May 1, 1997.

Reasons:

See # 980652. Since the court order was made before May 1997, there is no “commencement day”, as defined in subsection 56.1(4) of the Act and the order falls under the old child support rules. XXXXXXXXXX Generally, an order is made when it is rendered. This may not be the same date that the order is issued or the same date that the court order has legal force and effect.

XXXXXXXXXX 983181
G. Moore
December 16, 1998

Dear XXXXXXXXXX:

Re: Child Support Payments

I am replying to your letter of December 3, 1998, regarding child support payments.

In your letter, you request our comments regarding whether child support amounts payable made pursuant to the attached court order dated April 16, 1997, are tax deductible. As the court order had legal effect on April 16, 1997, you believe that the child support payments fall under the old rules.

Our Comments

As you know, child support payments made pursuant to a written agreement or court order that has a “commencement day”, as defined in subsection 56.1(4) of the Income Tax Act (the “Act”), are subject to the “new rules”. Child support payments made pursuant to an agreement or order that has no “commencement day” will, generally, be subject to the “old rules”. Paragraph (a) of the definition of “commencement day” states that an agreement or order made after April 1997 will have a commencement day on the day the agreement or order is made. Paragraph (b) of the definition of “commencement day” deals with the commencement day for an agreement or order made before May 1997, which would occur in situations such as where the parties elect to have the new rules apply or certain terms of the agreement or order are changed.

For a court order made after April 1997, the “commencement day” would be the day the court order is “made”. It is our view that generally, an order is “made” when it is rendered. This may not be the same date that the court order is “issued” or the date that the court order has legal force and effect.

A review of the court order enclosed with your letter indicates that it is dated April 16, 1997, and that child support amounts payable of $350 per month are required to be made commencing May 1, 1997. We are of the opinion that the order dated

April 16, 1997, would be “made” before May 1, 1997, for purposes of the definition of “commencement day” in subsection 56.1(4) of the Act. Accordingly, the court order would not have a “commencement day” and would be subject to the old child support rules.

We trust our comments will be of assistance to you. Please note that these comments represent our opinion of the law as it applies generally and, as stated in Information Circular 70-6R3, are not binding on the Department.

Yours truly,

J. Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

- 2 -